RBI's MPC Member Ashima Goyal Joins Clamor For Updating Inflation Basket
A dovish India rate setter said the distribution of weights in the inflation basket needs to be revised, joining others seeking urgent changes to the way the nation collects and uses its data.
(Bloomberg) -- A dovish India rate setter said the distribution of weights in the inflation basket needs to be revised, joining others seeking urgent changes to the way the nation collects and uses its data.
“These weights are based in 2012, and a lot of change has happened since then,” Ashima Goyal, an external member in Reserve Bank of India’s monetary policy committee said at an event Wednesday. The government should revise the weights and there are “various discussions going on with them,” she said.
READ: Spike in India Inflation Spurs Calls for Urgent Data Revision
A debate on aligning India’s data with the changes in the economy has gained momentum after consumer inflation breached RBI’s tolerance limit of 6% for two straight months. Economists have blamed over-estimation of cereal prices and antiquated data collection practices for the unexpected rise in the number used for deciding interest rates.
Goyal voted for a pause in the last policy meeting in February, preferring to wait for past rate actions to catch up. She continues to support that position and “hope that logic is appreciated by other MPC members” when they meet again next month.
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